STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS

STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS

The appeal was allowed in part: further evidence on appeal was admitted on special grounds; the Master’s open‑ended orders for all supporting audit working papers were varied and limited. The 3rd defendant must produce specified classes of primary transactional and banking records (cheque books and stubs, deposit slips, withdrawal slips, cash books, telegraphic transfer forms and confirmations, daily sales deposit records, daily sales receipts, purchase and expense records including contracts, invoices, goods receipt notes, receipts, diaries, petty cash books, and copies of contracts/agreements relating to assets) from incorporation to September 2008, verified on affidavit; audited...

Citation
STEP BY STEP LTD AND OTHERS v. DOROTHY JANE FURNESS AND OTHERS
Parties
1st Plaintiff: Step By Step Limited; 2nd Plaintiff: New Success Enterprises Limited; 3rd Plaintiff: Step Up Limited; 1st Defendant: Dorothy Jane Furness; 2nd Defendant: Raphael Homer Echaluce; 3rd Defendant: Entertain Company Limited; 4th Defendant: Mad Dogs Wanchai Public House Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 September 2009
Case Number
HCMP847/2007
Procedural Posture
Civil Discovery / Interlocutory Appeal From Master’s Decision in Court of First Instance
Outcome
Appeal allowed in part; Master’s orders varied to limit discovery to specified classes for 3rd defendant to Sep 2008; discovery for 4th defendant refused; audited accounts limited to end of FY 2007–2008; further evidence on appeal admitted; time for discovery and costs reserved for hearing.
Legal Topics
Specific Discovery, Relevance and Necessity, Tracing Misappropriated Funds, Scope of Audited Accounts, Admission of Further Evidence on Appeal, Costs
Source Language
EN
Civil Procedure Discovery Company Law Equity (tracing) Accounting/auditing Specific Discovery Relevance and Necessity Tracing Misappropriated Funds +3 more

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Parties

Step By Step Limited

1st Plaintiff

New Success Enterprises Limited

2nd Plaintiff

Step Up Limited

3rd Plaintiff

Dorothy Jane Furness

1st Defendant

Raphael Homer Echaluce

2nd Defendant

Entertain Company Limited

3rd Defendant

Mad Dogs Wanchai Public House Limited

4th Defendant

Procedural Posture

Civil Discovery / Interlocutory Appeal From Master’s Decision in Court of First Instance

Legal Issues

  1. 1 Whether further evidence should be admitted on appeal under Order 58 r 1(5)
  2. 2 Whether the classes of documents sought are relevant and necessary for fair disposal of the tracing issue
  3. 3 Whether the discovery requests were impermissibly overbroad and amounted to fishing

Ratio Decidendi

The appeal was allowed in part: further evidence on appeal was admitted on special grounds; the Master’s open‑ended orders for all supporting audit working papers were varied and limited. The 3rd defendant must produce specified classes of primary transactional and banking records (cheque books and stubs, deposit slips, withdrawal slips, cash books, telegraphic transfer forms and confirmations, daily sales deposit records, daily sales receipts, purchase and expense records including contracts, invoices, goods receipt notes, receipts, diaries, petty cash books, and copies of contracts/agreements relating to assets) from incorporation to September 2008, verified on affidavit; audited...

Court Disposition

Appeal allowed in part; Master’s orders varied to limit discovery to specified classes for 3rd defendant to Sep 2008; discovery for 4th defendant refused; audited accounts limited to end of FY 2007–2008; further evidence on appeal admitted; time for discovery and costs reserved for hearing.

Orders

  • Admit plaintiffs’ further affidavit into evidence on appeal
  • Order discovery from the 3rd defendant from incorporation to September 2008 limited to: cheque books and stubs, cash/cheque deposit slips, account withdrawal slips, cash books, telegraphic transfer application forms and confirmations, daily sales deposit records and daily sales receipts, purchase and expense records...